Preparing for the Midnight Avalanche of Regulations

Americans were repeatedly warned that they should expect an aggressive EPA regulatory agenda against fossil fuels if President Obama was re-elected – an agenda that would drive up the cost of energy, destroy jobs, and undermine the country’s economic competitiveness. And now we have that.

Despite the president’s “all of the above” energy rhetoric, there certainly is a basis for this concern. A number of economically significant regulations were stalled this year with final action being punted past the election to avoid any political fallout. At the top of Obama’s post-election list are greenhouse gas regulations on new power plants, which would essentially eliminate new coal plants, and the coal ash rule, which could cost over $100 billion over 20 years, destroying more than 300,000 jobs.

On fracking, the BLM regulation on federal lands could result in total aggregate costs of up to $1.6 billion for new permits and well workovers, and EPA is expected to issue guidance on the usage of diesel fuels. And let’s not forget the most economically destructive of them all – the ozone rule, which EPA estimates could cost the American economy $90 billion per year.

These concerns prompted Sen. James Inhofe (R-OK) to send a letter last month to the president asking for the administration to comply with the Regulatory Flexibility Act, which requires agencies to publish regulatory calendars in April and October of every year. The Obama administration – despite its calls for government transparency – has not published a regulatory agenda since late 2011.

The White House appears to have ignored Inhofe’s request, which provoked a sharp reaction from the senator last week:

President Obama is refusing to comply with the law that requires him to publish forthcoming regulations because he doesn’t want the American public to know the terrible cost of the regulatory barrage he plans to unleash in a second term.

Sen. Inhofe is undoubtedly right. And we should all be worried about an EPA that would be “unleashed” and unmanaged during a second Obama term.

With a re-elected Obama, we face roughly 10 weeks or so of maneuvering by the Obama team and their environmentalist partners to backdoor as much of their climate agenda as humanly possible in a lame-duck session. In fact, a couple of weeks back, the Washington Examiner reported that more than 50 EPA staffers were “crashing” to finish the greenhouse gas rule on new power plants – just in case President Obama lost reelection. Now they continue apace.

This news comes as no surprise to those of us who battled the Utility MACT regulation under the Obama EPA – a rule that began with a last minute finding by the Clinton Administration that power plants should be regulated for mercury emissions. In the end, that rule will cost the American economy over $10 billion annually by 2016.

So we ask ourselves the more important question. Specifically, what is the GOP game plan for defeating the certain avalanche of “midnight” environmental regulations that will be issued in a lame-duck session, and even after inauguration day?

“Midnight regulations” refers to the practice of finalizing rules and guidance during the final months of a presidency; frequently, these rules are too controversial to have been adopted earlier and benefit special interest groups. Moreover, issuing a slew of regs before inauguration would be incredibly difficult for any new administration to handle, particularly since many senior political appointees would not be in place until the summer and fall of 2013.

Speaker of the House John Boehner and Senate Minority Leader Mitch McConnell flagged this issue back in April of this year. In a letter to the president, the GOP leadership warned:

With the nation facing continued economic challenges, it would be ill-advised to issue a series of last minute controversial or economically significant regulations that would distract a new Congress and potentially a new administration from focusing on jobs and the economy.

Boehner and McConnell concluded by asking that the president reaffirm his pledge “to transparency, openness, and accountability by committing to withhold from issuing any economically significant or controversial “midnight regulations.” Unfortunately, President Obama ignored the request.

Now that Obama is back for a second term, we can be certain that there will be an avalanche of regulations that will target fossil fuel interests, particularly coal and natural gas.

Here’s a list of some of the major rules that would likely be included in the “midnight” reg avalanche:

- Coal Ash Generated by Electric Utilities

- Criteria and Standards for Cooling Water Intake Structures

- Emissions Standards for Hazardous Air Pollutants for Boilers

- Emissions Standards for Cement Manufacturing

- Greenhouse Gas Standards for Future Power Plants

- Hydraulic Fracturing on Federal Lands

- National Ambient Air Quality Standards for Particulate Matter

Combined, these regs would inflict a devastating blow against coal and destroy hundreds of thousands of jobs.

Fortunately, we have a legislative tool that can be used to check at least some of the rules – if not all of them. The Congressional Review Act (CRA), which was designed to bypass the filibuster rules in the Senate, could help fast-track efforts to kill any “midnight” rule. And because the Senate is the major legislative hurdle to clear, I’ve focused below on how the CRA would generally work in that chamber:

- Each “midnight” rule would need to be addressed separately, despite the likely narrow time frame that the regs were rolled out.

- Once a rule is transmitted to Congress, the Senate has 60 legislative calendar days to take action. However, a reach-back provision applies to all agency rules that are finalized up to 60 session days prior to end of the previous Congress. Consequently, any “midnight” reg issued after the election and before the end of the year would be considered as being received by the new Congress in the middle of January. It’s difficult to calculate precisely, but the deadline for a CRA vote would probably fall in late April to mid-May.

- Only 30 senators, supporting the use of the CRA, are needed to bypass regular floor procedure, including the relevant committee of jurisdiction. That’s incredibly important if the Democrats keep the Senate, and Chairperson Barbara Boxer maintains her control of the Environment & Public Works (EPW) Committee, which has jurisdiction over EPA.

- Approval of the CRA in the Senate only requires a majority of members present – at most 51. If the Republicans take back the Upper Chamber, meeting this threshold would obviously be much easier, though environmental politics are complicated. In last June’s vote on the Utility MACT CRA, for example, the measure failed 46 to 53 with five Republicans opposing and 5 Democrats supporting the resolution.

- If the CRA wins Senate approval, the measure should easily pass the House (assuming the GOP maintains control) and land on the President’s desk for signature. Since this scenario involves a Republican President who would oppose the “midnight” regs, there is no need to worry about a veto, to which a CRA can be subject.

- Once the President signs it, the rule must go back to EPA for review, essentially starting the process over again. Under the CRA, the relevant agency cannot produce a regulation that is “substantially similar” to the regulation that was rejected by Congress.

The CRA process sounds simple enough, but there’s a reason why it’s only been successfully used once – against the workplace ergonomics rule issued by the Clinton administration. The politics for winning Senate approval for a CRA is incredibly complicated and requires a sophisticated campaign for each and every rule, one that includes a public relations and advocacy campaign back in the States. Given the number of significant regulations that would likely be part of a “midnight” package, this task would not be simple.

In any Congress there is only so much political space. Because of staff, resource, and time constraints, members are likely to focus on the CRAs that are judged to be more easily addressed due to the Senate’s familiarity with the issue, such as climate change. Other regulations that are caught up in the avalanche may get “horse traded” away or simply ignored, particularly if they’re difficult to message politically.

Given the demands of pulling together an effective campaign that covers most of the significant rules, the time to start planning the counter strategy was yesterday. Waiting until the avalanche buries all of us would produce few survivors in the best-case scenario. Only a few of the lucky ones would have a chance at digging themselves out. And we would only have ourselves to blame. After all, every battle is won before it is ever fought.

Maybe conservatives and libertarians need to add Sun Tzu to their reading lists, along with Hayek and Rand. Sometimes our side forgets that we’ve been fighting a war against the enviros – one that we’ve been mostly losing. This “midnight” reg avalanche could be another victory that their side brags about after the snow dust clears.

A native Southeast Missourian, George “David” Banks is a policy advisor to Heartland, political commentator, and free market activist, focusing on energy and environment policy. He is also Senior Fellow for the Nuclear Energy Program at the Center for Strategic & International Studies in Washington, DC.

About the only hope we have is a Republican House that will not provide funds necessary for enforcement of these measures.

I don’t think there are any functional adults in the Exec branch and the Senate certainly cannot be relied upon to do anything more than damage.

harryhammer

Your camp has a long history of passionately opposing any and all regulations.

Conservatives such as yourself actively sought to undermine the office of the Commodity Futures Trading Commission, specifically under the leadership of Brooksley E. Born, when the Commission sought to initiate regulation of derivatives.

Ultimately, it was the collapse of a specific kind of derivative, the mortgage-backed security, that triggered the economic crisis of 2008.